Volumes of GDP. Methods for measuring GNP

The following macroeconomic indicators are given, billion dollars:

Define:

GDP (in two ways), net exports, gross investment, net factor income from abroad, GNP, PVP, NNP, ND, LD, RLD, personal savings, corporate income tax, government budget balance.

Solution:

1) Gross domestic product, calculated by expenditure, represents the sum of expenditures of all macroeconomic agents, which includes: consumer spending (consumption spending - C), gross private domestic investment (Igross), government purchases of goods and services (government spending - G), and net export (net export - NX):

Gross investment is the sum of net investment and the cost of capital consumed (depreciation):

Net exports (net export - NX) is the difference between export revenues (export - Ex) and the country's import expenses (import - Im) and corresponds to the trade balance:

Thus, the calculation of GDP by expenditure is as follows:

2) Gross domestic product, calculated by income, represents the sum of income from domestic and foreign factors. It is defined as Wages plus Rents plus Interest Payments plus Property Income plus Corporate Earnings plus Indirect Business Taxes plus Depreciation (cost of fixed capital) less Foreign Net Factor Income.
Net factor income from abroad is the difference between income received by citizens abroad and income received by foreigners in a given country:

Let's calculate GDP by income:

4) Knowing GDP, as well as the amount of net factor income from abroad, you can find GNP:

5) Net domestic product (NPP) is equal to the difference between gross domestic product and the cost of capital consumed (A):

6) Net national product (NNP) is equal to the difference between the gross national product and the cost of consumed capital (A):

7) National Income - ND (National Income - NI) is the total income earned by the owners of economic resources. It can be calculated in two ways:

National income is equal to the sum of: Wages plus Rents plus Interest payments plus Property Income plus Corporate Profits.

8) To calculate personal income - LD (personal income - PI), you should subtract from ND everything that is not at the disposal of households and is part of collective, not personal income, and add everything that increases household income, but is not included in ND.

9) Disposable personal income - RLD (disposable personal income - DPI) income at the disposal of households. RLD is calculated as the difference between Personal Income and Individual Taxes.

10) Households spend their disposable personal income on Personal consumption and Personal savings.

Macroeconomic indicators- these are summary indicators of consumption, production, expenses, income, welfare of the population, exports, imports, economic growth, etc.

Key macroeconomic indicators:

1. Gross national product (GNP)
2. Net national product (ChNP).
3. Gross domestic product (GDP).
4. Unemployment and inflation rates.
5. The state of the state budget.
6. Economic growth rate.

The most “indicative” of them are the first three.

Gross National Product (GNP).

GNP is a macroeconomic indicator of the system of national accounts, which reflects the total value of all goods and services created by residents of the country, regardless of their geographic location.

Gross national product is the main indicator of economic activity and economic activity in the state.

GNP is always calculated in money. Taking into account GNP in statistical activities is now not as common as before, and some economists consider this indicator to be outdated. The main disadvantages of GNP:

• does not take into account non-market production;
• does not take into account the products of the illegal economy;
• does not reflect the distribution of national income between different segments of the population;
• does not reflect non-economic factors (for example, environmental factors).

Net national product (NNP).

NNP is the total volume of all products of a country produced and consumed in all sectors of the national economy. The formula for calculating net national product is mathematically simple:

NNP = GNP - A

A is depreciation, that is, the costs of replacing or correcting physically or obsolete fixed assets and intangible assets.

You can just as easily calculate the value from NNP national income:

ND = NNP - KN

CN are indirect taxes (excise duties, VAT, etc.).

Gross Domestic Product (GDP).

GDP is the total value of final products, produced in the country, regardless of whether the manufacturer is a resident or a foreigner. That is, if Russia’s GNP takes into account what Russian citizens produced domestically and abroad, then GDP takes into account what was produced in Russia by both its citizens and foreigners. GDP calculation how the sum of the cost of the final product can occur in three GDP calculation methods:

• by income (from all goods and services sold);
• by expenses (for the acquisition of resources and the sale of goods and services);
• by value added (production method).

Method for calculating GNP based on expenses.

GNP calculation

GNP is calculated at current market prices, which represents its nominal value. To obtain the true value of this indicator, it is necessary to clear prices from the influence of inflation, weigh them, i.e. apply a price index, which gives the real value of GNP. In the USA, for example, in 1990, GNP in current prices amounted to $5,570 billion, and in constant prices – $4,254 billion.

The ratio of nominal GNP to real shows the increase in GNP due to rising prices and is called the GNP deflator.

GNP is characterized as “the most accurate total measure of goods and services that a country can produce” (P. Samuelson). Economists present two ways to measure it.

GNP is defined as the sum of goods and services available to society in a certain period of time. The value of GNP is the monetary value of the final products and services produced during the year. In other words, it is necessary to sum up all expenses for the acquisition (consumption) of the final product.

The GNP indicator includes:

Consumer spending (C).

Gross private investment in the national economy (Ig).

Government procurement of goods and services (G).

Net exports Xn, which represents the difference between exports and imports.

Thus, the expenses listed here constitute GNP and show market value annual production. Therefore, total GNP can be calculated using the formula:

GNP = C + Ig + G + Xn

GNP, on the other hand, is the sum of income individuals and enterprises (wages, interest, profit, rent) and is defined as the amount of remuneration for the owners of factors of production. In this case, GNP also includes indirect taxes for enterprises, depreciation, income from property.

GNP can also be defined as the sum of the incomes of sectors of the national economy.

The combination of two approaches to calculating GNP based on income and expenses is shown in Table 1. This scheme simultaneously describes two mutually agreed upon approaches to calculating the indicator under consideration. GNP, calculated by income, is distributed among wages of hired workers, rent payments, interest, dividends, income of individual owners, corporate income taxes, indirect business taxes, and depreciation deductions.

The following addition deductions, shown by arrows, allow us to obtain indicators of the net national product, national income. The scheme also takes into account taxes from citizens paid from personal income, taxes from corporations, social security contributions, sources of investment from enterprises, etc.

GNP, calculated by expenditure, includes 4 streams: private enterprise investment, government purchases of goods and services, consumer spending and net exports.

It is also obvious that the circulation of income is a renewable and expanding process: expenses stimulate the growth of income, which in turn allows for an increase in expenses.

Both methods are considered equivalent and give the same results.

GNP in the process of redistribution: a system of interrelated indicators.

GNP and GDP are not the only indicators of national accounts that reflect the movement of aggregate values ​​in the country's economy.

In economic theory and statistics, interrelated national accounts indicators, which are calculated on the basis of GNP, are widely used. These include net national product, national income, personal income, and disposable income.

Net national product is an improvement over GNP because it does not take into account depreciation charges. Net national product (NNP) measures the annual output that an economy (enterprise, organization, government or foreign citizen) is able to consume without reducing future production possibilities. From here

NNP = GNP – depreciation.

National income. To determine the indicator of the total volume of wages, interest, profit and rent, i.e. payments received in the production of GNP in a given year must be deducted from the NNP indirect taxes on entrepreneurs. The meaning of this calculation is that the state, by collecting indirect taxes from enterprises, does not invest anything in production and therefore cannot be considered as a supplier of economic resources. Thus, we can obtain the national income (NI) indicator. From the point of view of resource owners, ND is a measure of their income from participation in production for the current period. An enterprise considers NI as an indicator reflecting the price level for factors of production or resources.

Economists of various directions have been studying ND. Thus, the English economist of the 17th century W. Petty made an attempt in 1664 to analyze the income of a capitalist society and its distribution. He compiled a balance of income and expenditure of the population of England at that time. At the same time, when calculating the size of the income tax, he determined the amount of income of the entire population received from land, houses, capital and from labor resources.

Problems of production and ND were studied by A. Smith and D. Ricardo. They determined the value of the entire social product by the sum of society's income, excluding the cost of the means of production included in the cost of the product.

Similar views were held by the Swiss economist Simond de Sismondi, who did not distinguish between the values ​​of the annual product of society and ND.

The French economist Jean-Baptiste Sey argued that the value and utility of a thing is the result of the services of three factors of production - labor, land and capital, and the total value of all products consists of the income of three classes - workers, capitalists, landowners. ND is created by each person receiving income.

Modern Western economists have inherited from the economists of the past, primarily from Jean-Baptiste Say, the idea that ND is created by different and equal factors of production. The meaning of this approach is that each type of activity generates income equally, each recipient of income is at the same time its creator, regardless of profession and field of activity. This includes government officials, military personnel, clergy, etc.

American statistics, as noted above, define NI as the sum of wages, profits, interest, and rental payments. ND is less than GNP by the amount of indirect taxes and depreciation deductions from the cost of fixed capital. A number of scientists in our country still believe that it is economically unjustified to take into account the income from the activities of a policeman, military man, lawyer, or media worker in ND. All these professions, according to the approach of Marxist political science, create specific services, but are not directly related to the professions of social reproduction in the country. Moreover, according to these scientists, such a calculation method results in a repeated count of income, artificially increasing the income indicator by 20-30%.

Personal income (PI). Represents received income, as opposed to NI, which is earned income. It should be noted here that part of the earned income - social security contributions, corporate income tax and their redistribution - is not made available to the population. At the same time, transfer payments, which are not the result of the economic activities of employees, essentially represent part of their income. Thus, LD as actually received income can be calculated by subtracting from ND social insurance contributions, corporate income taxes, redistribution of profits, and adding the amount of all transfer payments.

Disposable income is at the personal disposal of members of society. Its value can be obtained by subtracting individual taxes (income, personal property taxes, inheritance taxes) from the LD.

Methodology for calculating gross domestic product (GDP) based on the flow of expenses and income.

Income

Private

disposable = Personal income - Income taxes, (3.7)

There are three methods for calculating GNP (GDP):

Table 3.1.

1. Value Added Method

To calculate GNP using this method, the value added indicator is introduced.

Added value- the market price of the company's products minus the cost of consumed raw materials and materials purchased from suppliers.

Added value - represents the difference between firms' sales and firms' purchases of materials, tools, fuel, energy, services, etc. In other words, added value- this is the market price of the company's products minus the cost of consumed raw materials and materials purchased from suppliers.

By summing up the value added produced by all enterprises, GNP can be determined, which represents the market value of all goods and services produced.

Sum of value added = Sum of all factor incomes =

= (Wages and salaries) + Rent + Rent +

+ Interest income + Profit of entrepreneurs. (3.8)

1. Method for calculating GNP based on expenses.

GNP is defined as the sum of goods and services available to society in a certain period of time. It is necessary to sum up all expenses for the acquisition (consumption) of the final product.

The GNP indicator includes:

1. Consumer spending (WITH): Personal consumption expenses.

Personal consumption expenditures include household expenditures, which in turn are divided into:

• consumer durables (cars, Appliances, and etc).
• current consumption goods (food, clothing, etc.).
• consumer spending on services (services of hairdressers, railway, Aeroflot, doctors, etc.).

2. Gross private investment in the national economy (I).

Investment is the expenditure on new capital goods in order to produce goods and services with their help. This is domestic private investment - private sector investment that is made within the country.

3. Government procurement of goods and services (G).

All government expenditures, including federal, state, and local governments, on the final output of businesses and on all direct purchases of inputs.

4. Net exports (X), which represents the difference between exports and imports.

Thus, the expenses listed here constitute GNP and indicate the market value of annual production. Therefore, total GNP can be calculated using the formula:

GNP = C + I + G + X, (3.9)

1. Method for calculating GNP based on income.

GNP, on the other hand, is the sum of the income of individuals and businesses (wages, interest, profit, rent) and is defined as the sum of the remuneration of the owners of the factors of production. In this case, GNP also includes indirect taxes on enterprises, depreciation, and property income.

GNP can also be defined as the sum of the incomes of sectors of the national economy.

GNP, calculated by expenditure, includes 4 streams: private enterprise investment, government purchases of goods and services, consumer spending and net exports.

It is also obvious that the circulation of income is a renewable and expanding process: expenses stimulate the growth of income, which in turn allows for an increase in expenses.

The amount of GNP income must completely coincide with the amount of expenses. If this does not happen, this means that the country lives at someone else’s expense, that is, it lives in debt.

Based on this indicator, it is calculated net national product, which is the difference between GNP and depreciation.

National income calculated by subtracting indirect business taxes from NNP.

Personal income determined by subtracting the following elements from the ND:

1. retained earnings of corporation P

2. taxes on corporate profits

3. social insurance accruals.

Personal disposable income determined by subtracting various individual taxes from personal income ( income tax, property tax).

GNP is not an abstract quantity. Therefore, its assessment is carried out in potential and real terms, taking into account unemployment, inflation and price changes.

Potential GNP output- this is the level of output that assumes the involvement of all economic resources in economic circulation, i.e., at full employment and full production volume. Actual output may be greater or less than potential output. The assessment is made by determining the “gap” between them:

, (3.10)

The gap is usually defined over the economic cycle. For a short-term period (year), nominal and real GNP are determined.

Nominal GNP is the cost of finished goods and services produced in the country’s economy during the year at current prices.

Real GNP– the cost of all finished goods and services produced in a given year, taking into account the prices of the base year.

The ratio of nominal GNP to real GNP is called the price index or GNP deflator.

Topic 3.2. Market mechanism of macroeconomic equilibrium

Basic conceptsI: Aggregate demand and aggregate supply. Factors influencing them. Macroeconomic equilibrium and factors influencing it. The concept of the cost multiplier and its significance.

The main macroeconomic indicators and statistics of countries, as well as international organizations, such as the UN, OECD, IMF, IBRD, is ⚡ GDP ⚡. It expresses the result of the functioning of the economy over a certain period of development, characterizes the finished products and services provided. Unlike the SOP GDP indicator previously used in our statistics, it does not include the cost of consumed items of labor and, therefore, excludes re-counting. On the other hand, GDP, unlike SOP, in addition to the results of material production, includes the cost of services produced.

Thus, GDP represents the gross value of all goods and services created on the territory of a given state during a certain period minus intermediate consumption. In other words, GDP- this is the sum of added value of all divisions of the national economy. It measures the results of the activities of business entities in the economic territory of a given state, but is not intended to assess production outside the country. GDP characterizes the value created by both residents and non-residents of a given state but does not take into account the value generated by residents outside the country.

To eliminate double counting, when calculating the value of a national product, care should be taken to include only the added value created by individual production. Value added is understood as the market price of the volume of products produced minus the cost of consumed raw materials and materials purchased from suppliers. In addition, GDP also excludes non-productive transactions, which are divided into financial transactions (they include three components: first, government transfer payments; second, private transfer payments; third, securities transactions) and sales of used goods.

In the national statistics of some countries, the main macroeconomic indicator can be considered GNP (used in the American and Japanese systems). In quantitative terms, the difference between GNP and GDP is small and, as a rule, amounts to no more than 1%. Unlike GDP, GNP characterizes the value of final products created by residents in the territory of a given state and abroad, but does not include the activities of non-residents in the economic territory of this country. In short, the definition of GDP uses the territorial principle, according to which goods and services are created by internal factors of a given state, regardless of who actually owns them. The calculation of GNP is based on the national principle, when the cost of products produced by residents is taken into account, regardless of their location. The difference between GNP and GDP is called net factor income from abroad. GNP is equal to GDP plus payments from abroad by residents producing products or providing services and located outside the country, minus payments by foreign residents for the services of factors of production owned by them located within the country.

GNP and GDP are calculated at current prices for comparison with other indicators and at comparable prices to study the dynamics of the physical volume of production.

Nominal GDP(GNP) is an indicator in current prices, i.e. existing at the time of calculation.

Real GDP is GDP at constant prices, i.e. adjusted for inflation.

The ratio of the nominal indicator to the real indicator shows how much GDP has increased solely due to rising prices, and therefore characterizes the change general index prices Categories also apply "potential GDP" "GDP lag". Potential GDP characterizes the volume of production that can be achieved with the available factors of production: the gap between this indicator and real GDP is the GDP lag.

Methods for calculating GDP

GDP can be calculated in three ways:

• production
• distributive
• end use

The basis for calculating GDP production method lies such a microeconomic indicator as gross output. The latter represents the value of goods and services produced by economic units - residents - for a certain period. This includes the production of industrial and agricultural products in value terms, transportation of goods, the cost of construction and installation work, and the production of other industries. The cost of services includes wholesale and retail, logistics and procurement, communication services, healthcare, culture, science, public organizations, services of government bodies, defense, financial institutions, pensions, services of various organizations serving enterprises and institutions. The volume of gross output also includes some categories of goods produced but sold. These include:

• products produced by enterprises for intra-industrial consumption
• products used for the construction of buildings and the production of other fixed assets
• products and services exchanged by barter
• products and services used to pay labor in kind
• agricultural and food products produced by households for their own consumption
• other products produced by households
• imputed income from living in your own home
• imputed payment for financial intermediary services

As for ground rent, it is considered as income from property and is not included in gross output. Thus, gross output includes the entire amount of goods and services produced in the national economy.

Calculating GDP using the production method consists of taking into account the gross output of the reporting period of production units of all industries at production prices minus their value of intermediate consumption at consumption prices. Thus, GDP is the sum of the added value of all producers of goods and services of a given state. Intermediate consumption includes:

• products and material services used in the production process (purchased and own production)
• payment for intangible services
• additional expenses (travel allowance, special clothing, special food, personal protective equipment, professional training costs)
• purchase of food and drinks by hotels, cafes, restaurants, medical and educational institutions
• expenses for current repairs
• food and service for military personnel
• expenses for the purchase of military equipment
• payment for services of financial intermediaries

In accordance with distribution method GDP is the total amount of income of all economic units and the population from all types of economic activity, as well as depreciation charges. More precisely, GDP as an income stream is represented by:

• firstly, the income of the owners (i.e. the amount of wages, interest, rental payments and other property income on the property before taxes)
• secondly, state revenues in the form of various indirect taxes
• thirdly, in the income of the business sector it is necessary to take into account depreciation deductions, which go towards the purchase of investment goods

You can consider GDP as the sum of primary income (wages, profits and other income), redistributed income (interest on deposits, income from bonds, dividends, social security receipts) and depreciation charges.

In more detail, GNP as an income stream includes the following components:

1. workers are, first of all, wages paid by the state and entrepreneurs to those who offer labor, plus many additions to it (employers' contributions to social insurance and to various private funds for pensions, health care and unemployment assistance).
2. Profits of firms and corporations are the income that remains after deducting the manufacturer’s expenses for wages, rent and interest. They are used to pay taxes, dividends, and retained earnings of corporations.
3. Income from unincorporated, individually or family-owned businesses and income from self-employed workers (lawyers, writers).
4. Income of property owners (real estate and natural resources), i.e. rent payments.
5. Interest on loan capital used in the production of GNP. Loan interest is the payment of private business income to the owners of monetary capital.
6. Depreciation is an annual deduction that shows the amount of capital consumed in the production process. In addition, GNP by income includes indirect taxes, i.e. taxes on value added, on the sale of goods, excise taxes, customs duties, etc. The state receives these unearned incomes for its maintenance by increasing prices. Government subsidies are deducted from GNP.

When applying the final use method, GDP will appear as the final consumption of material goods and services, capital investments, the increase in material working capital and the balance of foreign trade operations. Thus, GDP will include four streams of expenditure:

Firstly, Consumer Expenditures These are household expenditures on non-durable and durable consumer goods, as well as expenditures on services. The letter C is used to designate the totality of these expenses.

Secondly, the state, represented by its authorities, acts as a consumer, purchasing goods and services, for example, military equipment. Government consumption expenditure is denoted by G. It is important to note the fact that government procurement excludes all government transfer payments, since this category of expenditure does not reflect an increase in current production and is simply a transfer of part of government revenue to certain categories of persons.

The sum of consumer and government purchases represents final consumption. Household final consumption expenditure includes:

• purchases of goods in the public and cooperative sectors, on the market, from private individuals and self-employed persons
• purchases of market consumer services
• rent and utility bills
• payment for household services
• purchasing vouchers to sanatoriums, holiday homes and boarding houses
• payments for services of paid medical institutions
• expenses for purchasing tickets for entertainment and entertainment events
• payment for transport and communication services, legal and financial services
• trade markup on goods purchased through consignment stores
• value of products produced by households for own consumption

Thirdly, gross private domestic investment (I). They represent the expenses of the private business sector of a given state for the increase in investment in a given year (net investment), as well as investment goods intended to reimburse consumed machinery, equipment, instruments, etc., i.e. depreciation

fourthly, Some of the goods and services produced in the state are exported outside the state (export) and consumed in other countries, so they should be added. On the other hand, imported goods and services are worth subtracting because they are produced in other systems and do not reflect national production. Thus, the fourth component is net exports, i.e. difference between exports and imports (X).

Based on the above, GDP by end use is equal to:

Calculating GDP based on different components inevitably leads to discrepancies in its quantitative estimates. Most often, the discrepancies that arise are caused by the fact that the collected statistical data do not provide an absolutely reliable reflection of the quantitative content of economic transactions. In countries with a developed statistical service, such deviations are insignificant and at the GDP level, as a rule, do not exceed 1-2%. In statistical reference books, discrepancies between the values ​​of GDP calculated in various ways, as well as some other macroeconomic indicators, are reflected in a special column "statistical discrepancies".